You might think that as a 25-year human resources leader, I'd be a big fan of policies. Lots of HR people are simply crazy for policies. They'll enact a new policy every day if you let them. I take the opposite view: The fewer policies, the better. What I've seen in my years in HR is that policies are expensive, in several important ways.
Policies spring from situations that arise in the workplace. We used to say in my old HR department, "Once is a fluke, twice is a pattern, three times is a new policy." Maybe it's how to handle an employee's request to be paid part of his tuition reimbursement in advance. Maybe it's a policy defining the kinds of slacks that must be worn beneath the logo'd polo shirts in the company's booth at industry trade shows. You can write a policy for just about anything. And that's a problem, because policies come with costs.
In the first place, it's expensive to get a group together to sit down and walk through the possible scenarios that could result from the implementation of the new policy. A simple policy discussion can turn into a four-hour marathon as you begin to sort through the twists and turns that can accompany any attempt to say, We will always handle THIS situation like THAT. It's expensive to distribute the new policy and educate people on following it and administering it. Afterward, the day-to-day administration of the policy is expensive. Every time you write a new policy, you add a line to someone's—sometimes everyone's—job description.
Rules vs. Judgment
But policies are most costly because they take us away from our native mode, the way we'd work if we weren't aware of thick policy books hanging (figuratively) over our heads. When we hire smart people, we can rely on them to do the right thing most of the time and to employ their intellect and experience for the company's benefit.
When we saddle the same people with 100 or 200 policies to incorporate into their working lives, we put a major crimp in the system. The existence of these policies forces us to say, "Use your best judgment, most of the time—but don't lose track of each and every one of these policies, as you go through your day."
Policies can be complex and detailed. No one could commit all of his company's personnel policies to heart (forgetting about departmental operating policies altogether). So every time you think you might be veering close to any area covered by a policy, you have to stop and consult the policy manual, or consult your manager. That time lag is expensive. Can our policies meet the test of proving their value in light of the expense of having the policy in the first place? Most of them can't. But we love to enact policies, so we keep 'em coming. And that slows our companies down.
Pruning the Policies
Now there are policies that are required by law or by a company's ethical standards, and we need to have them in place. I'm talking about anti-discrimination policies and policies that prohibit employees from making off with the company's assets or selling the company's customer list to some guy in an alley.
These policies make sense. But so many others—from detailed dress codes to policies on who may date whom in the office to policies that detail the circumstances under which an employee may take a cab alone vs. sharing a cab while on business travel—don't hold up. Someone has to manage them, everyone has to live under them, and they steal exactly what the firm is trying to maximize—the focused, distraction-free engagement of its employees.
Time for an Update
One time, as an HR manager, I had a visit from an employee who said: "I have a suggestion. Why not get rid of half the policies in this policy handbook?"
"Wow, that's hilarious," I answered. He said: "You know, at the new employee orientation I attended, you stopped in to greet the new employees. And that day, you said: 'Our company doesn't want anything to deter you from making great products and selling them. If you see us doing something stupid, I want you to let us know.' And some of these policies are beyond stupid."
I asked him to go through the handbook and identify the 10 stupidest policies. I had to admit, some of them were pretty bad. There was the time-worn policy that said that expense reports filed more than 30 days late wouldn't be paid. We had that policy, but we didn't follow it (our employees would have quit if we did). We paid the late reports, but we groused about it.
Less Management by Policy
My policy-hating friend said, "Why don't you just stress the importance of filing expense reports on time, instead of making it a threat?" He found a few other silly policies, such as the one that required an employee to bring in a doctor's note when the employee was out sick for two consecutive days. Who goes to the doctor for two days of illness? When we reprinted the policy manual the next time, we got rid of a bunch of the policies that just made no sense. We couldn't keep them and truthfully say, "We don't want to deter you from making great products and selling them."
I'd love to see a company put as much rigor and leadership force behind the effort to eliminate policy proliferation as it puts behind its efforts to improve quality or reduce cost. Policy mania is a corporate disease that has killed the spirit of many an employee population. More conversation and less management by policy is a smarter and cheaper way to solve problems.
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